Russian Economy General News: #4

Of course the $100 trillion in resources Russia has are never counted in any "accounting" done to evaluate its worth.
Supposedly the 50% drop in the ruble resulted in a 50% reduction in the size of the economy.   Just going by resources
alone this is complete bollocks.   If Russia was merely a resource exporter it would get 2x more rubles for its exports.
Of course some smarmy western analist (spelling deliberate) would claim that Russia produces nothing of value (LOL at
the analist and the retard Obama for believing him) so it imports everything.   And the imports are 2x as expensive.
Ergo economic collapse (in the minds of these intellectual "giants").   But somehow Russia's foreign trade balance is
positive and has actually increased.   This is a paradox in the theory of Russia's economy being peddled in the west.
But paradoxes are an indication of logical contradictions and hence that the theory is BS.

Austin wrote:Gold is the best investment any one can put into , More reliable then any fiat currency......Reason CBR and China is holding and increasing Gold reserves they know what would be coming in years ahead

what would be coming in years ahead？

type055 wrote:

Austin wrote:Gold is the best investment any one can put into , More reliable then any fiat currency......Reason CBR and China is holding and increasing Gold reserves they know what would be coming in years ahead

what would be coming in years ahead？

US default on the debt, it's been on the verge for the past 4 years.

Didn't know where else to put this but:

Russian automakers negotiating vehicles assembly in Iran

This is interesting. So they are going to try to get Iran automakers to start assembling Russian vehicles for more export, I guess for Iran and Iraq market. This is a good move.

Russia sees new economic prospects for ties with Iran after sanctions lifted

Since Russia is already sanctioned, they should be doing this now.

Boom Bust, Fed edition https://youtu.be/Z0u2TzNxVJc
Boom Bust, Fed Edition (Part II) https://youtu.be/edqx_MI1wR8

magnumcromagnon wrote:

type055 wrote:

Austin wrote:Gold is the best investment any one can put into , More reliable then any fiat currency......Reason CBR and China is holding and increasing Gold reserves they know what would be coming in years ahead

what would be coming in years ahead？

US default on the debt, it's been on the verge for the past 4 years.

The US default is not really an issue its just an artificial limit set for republican to fight.

The real issue is else where check the 2 part Fed interview i posted above will give you an idea where the real issue is.

type055 wrote:

Austin wrote:Gold is the best investment any one can put into , More reliable then any fiat currency......Reason CBR and China is holding and increasing Gold reserves they know what would be coming in years ahead

what would be coming in years ahead？

Russian Central Bank did 3 Big Mistakes after 2008 crisis when RUssian GDP went down 8 %

1 ) They did not went for big Gold buy which is what they are doing for past 1.5 years.

If they had done that they would have had Gold about 3 - 4 thousand ton , instead they went on buying USD

2 ) They should have made Rouble Free Floating after that crisis.

Since they purchased USD like mad it made Rouble Artifically Stronger then what it should be.

3 ) They should stop full capital account convertibility which they are not doing even now !

Austin wrote:

type055 wrote:

Austin wrote:Gold is the best investment any one can put into , More reliable then any fiat currency......Reason CBR and China is holding and increasing Gold reserves they know what would be coming in years ahead

what would be coming in years ahead？

Russian Central Bank did 3 Big Mistakes after 2008 crisis when RUssian GDP went down 8 %

1 ) They did not went for big Gold buy which is what they are doing for past 1.5 years.

If they had done that they would have had Gold about 3 - 4 thousand ton , instead they went on buying USD

2 )  They should have made Rouble Free Floating after that crisis.

Since they purchased USD like mad it made Rouble Artifically Stronger then what it should be.

3 ) They should stop full capital account convertibility which they are not doing even now !

One major flaw in stopping full capital account convertibility is sometimes it causes (well, may actually) a panic and people start dumping their currency for others, about same like a currency that fell. But I agree mostly for all points. CBR back in 2008 though didn't expect the sanctions to ever happen. But then again, they should have prepared themselves for this mess rather than doing it all now. But at least this will be a matter of experience and teachings.

The tap is open, Chinese yuan credits are flowing into Russia. Sberbank took 300 millions dollars worth of yuan. - Note, not dollars but yuan to the equivalent value. - This is extremely important in many respects: 1. The dedollarization of Russia's and global economy has taken huge leaps forward. 2. Shows Russia will get financing elsewhere after NWO cut off financing. 3. Russian imports will now be increasingly redirected towards China, there's the financing, there's the deal. Russian imports from EU will soon dwindle down to almost nothing. It is already 40% down now, will be minus 70 - 80% within a couple of years when the new import substitution industries will be up and running. EU does not have any such technologies that Russia cannot produce within a couple of years or buy from China. 4. There is nothing that EU and US can threaten Russia with any more, except war, which they are doing. But we all know how that would end. - Is this what the European business executives want? Why don't they goddammit speak up!    



http://tass.ru/armiya-i-opk/1880594  

max steel wrote: The tap is open, Chinese yuan credits are flowing into Russia. Sberbank took 300 millions dollars worth of yuan. - Note, not dollars but yuan to the equivalent value. - This is extremely important in many respects: 1. The dedollarization of Russia's and global economy has taken huge leaps forward. 2. Shows Russia will get financing elsewhere after NWO cut off financing. 3. Russian imports will now be increasingly redirected towards China, there's the financing, there's the deal. Russian imports from EU will soon dwindle down to almost nothing. It is already 40% down now, will be minus 70 - 80% within a couple of years when the new import substitution industries will be up and running. EU does not have any such technologies that Russia cannot produce within a couple of years or buy from China. 4. There is nothing that EU and US can threaten Russia with any more, except war, which they are doing. But we all know how that would end. - Is this what the European business executives want? Why don't they goddammit speak up!    



http://tass.ru/armiya-i-opk/1880594  

They have been speaking up. The problem is, people like Merkel does what she is told. Add in that her popularity is very low, and so are a bunch of other european leaders who have hurt their business dealings with Russia, Hollende included. But they don't care. They will do as they are told regardless how their own people feel. Protests in Czech Republic over NATO parade and what not. But to hell with people, right?

max steel wrote: The tap is open, Chinese yuan credits are flowing into Russia.

http://tass.ru/armiya-i-opk/1880594

Great

sepheronx wrote:

3 ) They should stop full capital account convertibility which they are not doing even now !

One major flaw in stopping full capital account convertibility is sometimes it causes (well, may actually) a panic and people start dumping their currency for others, about same like a currency that fell.  But I agree mostly for all points.  CBR back in 2008 though didn't expect the sanctions to ever happen.  But then again, they should have prepared themselves for this mess rather than doing it all now.  But at least this will be a matter of experience and teachings.

Turns out the CBR was right not to introduce capital controls.

On the other hand the west, that bastion of "free commerce, rule of law and inviolability of private property" does have capital controls....they're pulling every dirty trick they can to prevent the return of private capital to Russia in response to the Ru government's amnesty offer....so in other words, they're bigger thieves than than thieves they're robbing (the ones that took the money there in the first place).


______________

Apparently, Russia expects to earn more from the sale of high power turbines in 2015 than from weapons sales

Russia turns the world - in 2015, Russia made ​​a breakthrough in the export of high-power turbines.
Sales of this complex and extremely expensive equipment can earn more for the country than the export of arms.

(rus)
http://stockinfocus.ru/2015/04/02/rossiya-sovershila-silovoj-zaxvat-mira/

Even western media is starting to change its tune about
"Russia economy collapse".

The Central Banker Who Saved the Russian Economy From the Abyss

(Bloomberg) -- Panic reached the inner sanctum of the Russian central bank.
It was Dec. 16 -- the day Russian traders would later christen Black Tuesday -- and the ruble was in a freefall.
“Intervene! Intervene!” a central bank official shouted.
Governor Elvira Nabiullina watched the currency on her tablet screen react to her emergency rate increase. No, she said, not this time: Russia would no longer fight the market. Speculators needed a cold shower, she said.
That daring decision, related by two people with knowledge of the meeting, has begun to pay off for Nabiullina, 51, and her patron, President Vladimir Putin. Despite sanctions meant to punish Russia for its foray into Ukraine a year ago, the ruble has stabilized. Since Black Tuesday, when it plunged to a record low, the ruble has rebounded 19 percent against the dollar, the most among 24 emerging-market currencies.

http://www.bloomberg.com/news/articles/2015-03-25/with-hotline-to-kremlin-nabiullina-turns-from-ruble-to-economy

I couldn't believe Putin will allow Russia to be destroyed from the inside.. this shows
the central bank of Russia is not a puppet of the west.. like some advisors of kremlin believed.
The new Russian national payment system.. is also operating in some banks.. Russia have already passed the worse and now is the time for Russia economy healing .   .

Vann7 wrote:
I couldn't believe Putin will allow Russia to be destroyed from the inside.. this shows
the central bank of Russia is not a puppet of the west.. like some advisors of kremlin believed.
The new Russian national payment system.. is also operating in some banks.. Russia have already passed the worse and now is the time for Russia economy healing .   .

They are mainly liberals and believers in the western economic system (idealised version). Their sin is that they didn't want to have a boss above them but wanted to be accepted as senior and equal members of the club....

They were beholden to the IMF policies in regards to Russia which can be summarised as sell oil & gas and import just about everything else (mainly from the west). All the stuff they are doing now, they should've been doing in the last 10 years already. I think the severity of this political clash has been a rude awakening even for the liberals in the Russian government.

http://www.globalresearch.ca/the-real-causes-of-the-catastrophic-crisis-in-greece-and-the-left/5365013

Nice article on why free trade is an idiotic idea for weak economies. It results in the outflow of wealth to
the countries with stronger economies. Every single rich country had protectionism when it was developing.
This applied to the USA, UK, France, Germany, Canada, Japan, South Korea. All of them. But tardwit Yeltsin
sold his country down the river for a bottle of vodka when the neo-liberals showed up to "help" Russia transition
from a command economy. Russia was the very definition of a developing country during the 1990s due to the
transition. It was not a 3rd world country but almost became one thanks to this monetarist nonsense.

World Bank Economic Projection 2015-2016

Forecast of the main macroeconomic indicators of the Russian Federation

http://www.kommersant.ru/doc/2699517

Austin wrote:World Bank Economic Projection 2015-2016

Forecast of the main macroeconomic indicators of the Russian Federation

http://www.kommersant.ru/doc/2699517

World bank was bitching and moaning about Russias CBR policies and were even more mad about Chinas AIIB, which many sees it as a coup against them. Since then, they have had a rough going against Russia, China and a lot other countries. While the economists within the country who monitor their progress are saying a somewhat different tune that 2016 will be the year of growth for them. World bank has changed their outlook quite recently to more negative view, if on purpose or what. But Russia joining the AIIB is one of the smartest moves and will give Russia a lot of opportunity for infrastructure financing.

With both the AIIB and BRICS bank, things are gonna be interesting. Add in that now most payments are in domestic card service, more money will flow internally.

@KVS

South Korea and Japan had such heavy protectionism and favoritism (nurturing of a specific company) to the point that both these nations are run by about 4 - 6 corporations. S.Korea main enterprises are Hyundai, Daewoo, Samsung and LG. There wont be any other brand name unless it ends up as a daughter company of the 4 listed. But this is what made S.Korea wealthy and a known country in sales of products worldwide.

Protectionism was key.

Moscow skyline 2000:


Moscow skyline 2015:

http://www.bloomberg.com/news/articles/2015-04-05/ruble-whipsaws-top-forecasters-as-worst-currency-becomes-best

Funny how all the forecasters utterly failed to predict the course of the ruble exchange. The ruble is back to 56 to the dollar
even though the oil price has not recovered. I guess western market manipulators have realized that sanctions and Sorosian
attacks on the currency will only act to stimulate the Russian economy resulting in long lasting structural adjustment that will
cut off western access to the Russian market (in any way that the west would want it) and result in long lived GDP growth in
Russia simultaneously with diversification of its economy away from resource exports. (Not that it is some banana republic, as
it already has quite advanced manufactured exports). So the manipulators are backing off on trying to devalue the ruble as
that produces the equivalent of iron-clad trade protection from Russia. The manipulators need free trade access to rape Russia.

kvs wrote:http://www.bloomberg.com/news/articles/2015-04-05/ruble-whipsaws-top-forecasters-as-worst-currency-becomes-best

Funny how all the forecasters utterly failed to predict the course of the ruble exchange.   The ruble is back to 56 to the dollar
even though the oil price has not recovered.    I guess western market manipulators have realized that sanctions and Sorosian
attacks on the currency will only act to stimulate the Russian economy resulting in long lasting structural adjustment that will
cut off western access to the Russian market (in any way that the west would want it) and result in long lived GDP growth in
Russia simultaneously with diversification of its economy away from resource exports.  (Not that it is some banana republic, as
it already has quite advanced manufactured exports).   So the manipulators are backing off on trying to devalue the ruble as
that produces the equivalent of iron-clad trade protection from Russia.    The manipulators need free trade access to rape Russia.  

Now the trade is at 55 to the dollar.
The war in Yemen and the Cease of Fire in Ukraine helped for sure.. and also Europe rejection
of more sanctions on Russia. I think the sanctions expire this summer and they will not
have complete support in Europe to extend them more..

sudden appreciation of ruble will make things difficult for government .

max steel wrote:sudden appreciation of ruble will make things difficult for government .

Yes and no. It will help with the proposed imports from various countries like Iran and Vietnam. Will also help with their investments when ruble was lower. Will make things a tad more expensive but will also help in lowering the interest rates if CBR will lower it. It raised but didnt jump too muvh so the difference in prices will be none noticeable for domestic goods but if interest drops, that will be noticeable on the good spectrum. Where the ruble is now is pretty good. Still makes it cheap to produce in Russia compared to others. Yuan rate also helps that it has climbed against Ruble.

Any and all oligrach interests who are politically and financially impeding the immediate utter diversification of the russian economy and instead rely on the "expectation" that oil pricies will become higher short term should be removed of all political power and have their assets nationalized to serve the russian 99% and finance said diversification instead of further drilling and riviera mansions. And if you're against this because "muh goood christian free market doesunt allow" then this proves capitalism itself together with any kind of powerful bourgeois class existing in Russia is detrimental to russian economical development and strategy and therefore should be eliminated.

The refusal of United Russia to stand against the neoliberal interests of said fossil fuel tycoons prooves that in the end the party's allegiance is not with the russian working classes(which inconveniently for the bourgeois and nazi monarchist lobbyists comprises the absolute majority of the country) but with the oligarchs, so united russia therefore doesn't have the russian nation and people in it's interest but instead it's own pocket and corporate sponsors.

Cyberspec wrote:Assets of Russian banks for the year increased by 20.24 trillion rubles

Assets of Russian credit institutions in 2014 increased by 20.24 trillion rubles as of 1 January 2015 reached 77.66 trillion. This is according to information-analytical service Banki.ru.

Largest increase in corporate loan portfolio (plus 7.04 trillion rubles, or 31.3%), cash placed on the interbank lending market (an increase of 1.76 trillion, or 34.4%), retail loan portfolio (up by 1 37 trillion or 13.8%), as well as investments in derivative financial instruments (2.12 trillion or 1207%).

http://sdelanounas.ru/blogs/60177/

I wonder how much of that is bad assets and loan with little hope to recover if any.

The derivative market globally is one over inflated thing and worst of financial instrument based on inverted pyramid

Nice

Russia Offers Indonesia Mutual Transactions in National Currencies